/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/110627.mbx C L A S S A C T I O N R E P O R T E R Monday, June 27, 2011, Vol. 13, No. 125 Headlines BP: Seeks Dismissal of 12 Oil-Spill Claims in MDL Suit CARLYLE CAPITAL: Accused in D.C. Suit of Misleading Shareholders CHESAPEAKE APPALACHIA: Class Action Over Gas Royalties Settled COMMUNITY HEALTH: Kaplan Fox Files Securities Class Action DEUTSCHE BANK: Robbins Geller Files Securities Class Action DIAL CORP: Faces Class Action Over Misleading Marketing Campaign EDEBITPAY LLC: Faces Class Action Over Payday Loan Scam FRONTIER OIL: Reaches Deal to Settle Merger-Related Suit in Texas HOLLY CORP: Settles Frontier Merger-Related Suit in Texas JPMORGAN CHASE: Sued Over Alleged Hazard Insurance Kickbacks METROPOLITAN LIFE: GM Retirees File Suit Over Slashed Benefits NAPA HOME: Recalls 460,000 NAPAfire and FIREGEL Bottles and Jugs RITE AID: Files Class Action Over Seating Policy SCHOOL DISTRICT OF PHILADELPHIA: Sued Over Transfer Policy SENSASLIM: Faces AU$4.2-Mil. Class Action Over Diet Spray SOUTHERN UNION: Being Sold for Too Little, Tex. Suit Claims SZ ENTERPRISES: Faces Class Action Over Unpaid Wages UNITED STATES: Homeless Veterans File Class Action ********* BP: Seeks Dismissal of 12 Oil-Spill Claims in MDL Suit ------------------------------------------------------ Sabrina Canfield at Courthouse News Service reports that BP wants to dismiss 12 oil-spill claims from states in Mexico, district attorneys in Louisiana, and Alabama cities, because they allege state law violations, though the Gulf oil spill is a matter for federal law. "It would be quite a feat for one federal statute (OPA) [the Oil Pollution Act], by silence, to strip other federal statutes (the CWA and OCSLA) [Clean Water Act and Outer Continental Shelf Lands Act] of the preemption necessary for their operation," BP attorneys wrote. BP claims that because the oil spill came on the Outer Continental Shelf, which is subject to the federal Outer Continental Shelf Lands Act (OCSLA), state laws do not apply, even when the oil damaged state waters and coastlines. And because federal law takes precedent, BP says, the lawsuits from the Alabama cities and Mexican states must be thrown out for violating OPA regulations, which require presentment of claims before a lawsuit is filed. Finally, BP says, the Mexican states' lawsuits do not allege any actual damages, and there is no contract between the United States and Mexico regarding recovery of environmental damages caused by oil spills from foreign entities. "A state has no independent authority, under common law or otherwise, to regulate pollution that originated from a source outside its territory, even if the effects of the pollution are felt within the state. See Int'l Paper Co. v. Ouellette, 479 U.S. 481 (1987)," BP says in its complaint. "Although the law under OCSLA is exclusively federal, its content may be borrowed from the law of the adjacent state. But the adjacent state's law may apply (if at all) (i) only indirectly as surrogate federal law and (ii) only if necessary to fill a gap in federal law. . . . In this case, because OPA and the Clean Water Act provide comprehensive remedial and penal schemes to address oil spills, there is no place for state law, and all state law claims brought by the Alabama cities, the Mexican states, and the Louisiana district attorneys are preempted," according to the complaint. In August 2010, at the urging of the federal government, BP, as "responsible party," established a $20 billion fund to pay claims through its Gulf Coast Claims Facility (GCCF), which is overseen by Kenneth Feinberg. The purpose of the facility, under OPA, is to provide a way for claimants to circumvent litigation, which could take years, and get a quick payment for damages from the oil spill. BP says that lawsuits by the Mexican states and Alabama cities were filed without presentment to the GCCF, so should be dismissed. BP adds that even if the Mexican states did present claims to BP before filing lawsuits, it wouldn't matter, because there is no oil spill agreement between the United States and Mexico. "The Mexican States concede that, because they are foreign claimants, OPA requires that they 'shall demonstrate' that recovery is 'authorized' by a treaty or executive agreement between the United States and Mexico. . . . The Mexican states cite four treaties that they contend 'provide for the protection of the environment' and thus 'authorize their claims.'" But BP says that isn't true, as none of the agreements the Mexican states cite and "to which the United States is a party contains such provisions. These agreements touch on certain environmental or boundary issues, but do not authorize recovery of removal costs or damages, as required by OPA if a foreign claimant is to recover. "In the Agreement of Cooperation Between the United States of America and the United Mexico States Regarding Pollution of the Marine Environment by Discharges of Hydrocarbons and Other Hazardous Substances ("Hydrocarbon Pollution Agreement"), the United States and Mexico 'agree[d] to establish a United States- Mexico joint-contingency plan regarding pollution of the marine environment by discharges of hydrocarbons and other hazardous substances . . ., with the object of developing measures to deal with such polluting incidents and ensuring an adequate response. . . . The agreement does not authorize Mexico claimants to pursue damages under OPA or any other law, or otherwise mention compensation," BP says. Somewhere between 130,000 and 140,000 litigants seek damages in the oil spill litigation. Because every lawsuit has several plaintiffs, slightly fewer than 400 lawsuits have been filed. The litigation stems from the April 20, 2011 explosion of the Deepwater Horizon that killed 11 and set off the worst oil spill in U.S. history. Attorneys overseeing the case have sorted claims into bundles, depending on allegations. The 12 cases BP wants to dismiss belong to Bundle C. "In an effort to avoid preemption under the Clean Water Act, plaintiffs contend that BP's arguments rely on an 'overextended misrepresentation' of the holding of Ouellette. (Mex. States' Br. at 30-32; see also La. District Attorneys' Br. at 7-8; PSC's Br. at 28-31.) On the contrary, Ouellette's holding is squarely on point: Ouellette held that only the federal . . . system and the law of the source state can regulate discharges of pollution within such a state, whereas other states (even if affected by the pollution) lack the power to regulate water pollution beyond their borders." BP added: "It would be quite a feat for one federal statute (OPA), by silence, to strip other federal statutes (the CWA and OCSLA) of the preemption necessary for their operation. Where, as here, Congress expressly limited a savings clause to save only those claims that would otherwise be preempted by a defined statute, it could not possibly have intended (without any indication in the text) that the same narrow savings clause could save claims that are expressly preempted by an entirely different and preexisting federal statute. To conclude otherwise would be even more illogical than interpreting a statute's savings clause to save claims that the statute itself preempts." As for the Louisiana district attorneys' claims, BP wrote: "Although the Louisiana Parish District Attorneys insist that a savings clause for wildlife penalty cases in LOSPRA [Louisiana Oil Spill Prevention and Response Act] preserves their claims, they neglect to quote the actual language of the clause, which plainly refutes their argument: 'Nothing herein shall be construed to preclude the Department of Wildlife and Fisheries from bringing a civil suit to recover penalties for the value of each fish, wild bird, wild quadruped, and other wildlife and aquatic life unlawfully killed, caught, taken, possessed, or injured pursuant to R.S. 56:40.1 et seq.' La. Rev. Stat. Sec. 30:2491 (B)." The motion to dismiss the 12 lawsuits was filed by Don Haycraft, with Liskow & Lewis of New Orleans, in the document, "BP's Reply in Support of Motion to Dismiss Certain Complaints in Pleading Bundle C." A copy of BP's Reply in Support of Motion to Dismiss Certain Complaints in Pleading Bundle C in In Re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 (E.D. La.) (Barbier, J.), is available at: http://www.courthousenews.com/2011/06/21/BPBundleC.pdf CARLYLE CAPITAL: Accused in D.C. Suit of Misleading Shareholders ---------------------------------------------------------------- Greenfield & Goodman, LLC and Cuneo Gilbert & LaDuca, LLP on June 22 disclosed that two related class actions have been commenced in the United States District Court for the District of Columbia on behalf of certain purchasers of the Class B shares and restricted depositary shares of Carlyle Capital Corporation, incorporated in Guernsey, Channel Islands, and currently in liquidation during the period from June 19, 2007 through March 17, 2008, inclusive and were damaged thereby, seeking to pursue remedies under the Securities Exchange Act of 1934. On March 17, 2008, the Royal Court of Guernsey entered a "winding up" order directing that CCC be liquidated. If you wish to serve as lead plaintiff in one or both of the actions commenced, you must move the Court no later than 60 days from June 22, 2011. If you wish to discuss these actions or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Richard D. Greenfield, Esq. at Greenfield & Goodman LLC at 917-495-4446, or via e-mail at whitehatrdg@earthlink.net or Matt Miller, Esq. at Cuneo Gilbert & LaDuca at 202-789-3960, or via e-mail at mmiller@cuneolaw.com Any member of the Class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent Class member in either or both cases. The Complaint in Phelps v. Stomber, et al, Civil Action No. 11- 1142 (D.D.C.) charges certain of the former officers and directors of CCC with violations of the Exchange Act. The Complaint in in E.L. Phelps v. Carlyle Capital Corp., Case No. 11-cv-01143 (D.D.C.) (Berman, J.) charges CCC with violations of the Exchange Act. A copy of this is available at: http://www.courthousenews.com/2011/06/22/Carlyle.pdf The Plaintiff is represented by: Jonathan W. Cuneo, Esq. Matthew E. Miller, Esq. CUNEO GILBERT & LADUCA, LLP 507 C Street, N.E. Washington, DC 20002 Telephone: (202) 789-3960 E-mail: mmiller@cuneolaw.com - and - Richard D. Greenfield, Esq. Marguerite R. Goodman, Esq. GREENFIELD & GOODMAN, LLC 250 Hudson Street, 8th Floor New York, NY 10013 Telephone: (917) 495-4446 E-mail: whitehatrdg@earthlink.net The Complaints allege that, throughout the Class Period, the defendants made material misrepresentations and failed to disclose material adverse facts about the Company's true financial condition, business and prospects. Specifically, the Complaints allege that, inter alia, defendants caused the Company to disseminate financial statements that were not fairly presented and failed to make complete and timely disclosures concerning certain actions taken by CCC's officers and directors which resulted in the Company's eventual entry into "winding up" proceedings. Richard D. Greenfield, Esq. of Greenfield & Goodman, LLC has over 30 years of experience in banking, securities and consumer litigation, having served as Lead or Co-Lead Counsel for plaintiffs in many shareholder class and derivative actions. Mr. Greenfield is a former director of a NYSE-listed bank holding company. Cuneo Gilbert & LaDuca -- http://www.cuneolaw.com-- is a firm that specializes in the representation of plaintiffs in consumer, antitrust, civil rights and securities class actions and is active in major litigations pending in federal and state courts throughout the United States. It has offices in Washington, D.C., New York, Los Angeles and Alexandria, Va. CHESAPEAKE APPALACHIA: Class Action Over Gas Royalties Settled -------------------------------------------------------------- Claire Galofaro, writing for TriCities.com, reports that the smallest of the half-dozen class-action suits over coalfield gas rights was settled on June 22 for $3.4 million, to be split among some 1,850 Southwest Virginia landowners. The lawsuit alleges that Chesapeake Appalachia, a subsidiary of the nation's second-largest producer of natural gas, Oklahoma- based Chesapeake Energy Corp., underpaid gas royalties to landowners for decades, eventually resulting in an approximate loss of just under $3.6 million. The $3.4 million settlement represents 95% of that loss, which attorneys for the plaintiffs described on June 22 as a "remarkably high recovery." Landowners who leased their gas to Chesapeake will receive a notice in the mail once the settlement is finalized at an Oct. 4 hearing. They will have the choice to do one of three things: * do nothing, remain a class member and receive a check in the mail. Attorneys' fees and other expenses will be deducted from the $3.4 million, which will then be divided among the landowners involved based on their percent of the total royalties paid. For example, if Chesapeake had paid $100 in royalties to Southwest Virginia landowners and John Smith received 10%, or $10, Smith would be entitled to 10% of the settlement. * opt out and receive none of the settlement money. Those who opt out retain their right to sue the company individually. * object to the proposed settlement. The class action is one of six pending in federal court and, compared to the other five, is of a relatively small scale. Chesapeake Appalachia operates far fewer gas wells in Southwest Virginia than CNX Gas Co. and EQT Production Co., the two companies listed as defendants on the other five suits. The June 22 settlement was the first resolution to any of the cases. COMMUNITY HEALTH: Kaplan Fox Files Securities Class Action ---------------------------------------------------------- Kaplan Fox & Kilsheimer LLP has filed a class action suit against Community Health Systems, Inc. and certain of its officers and/or directors that alleges violations of the Securities Exchange Act of 1934 on behalf of purchasers of Community Health Systems common stock during the period July 27, 2006, through April 11, 2011, inclusive. The case is pending in the United States District Court for the Middle District of Tennessee (Civil Action No. 11-00601). A copy of the complaint may be obtained from Kaplan Fox or the Court. The Complaint alleges that, throughout the Class Period, defendants emphasized the Company's positive financial performance and future business prospects, but failed to disclose or recklessly disregarded that the Company's performance has been driven by the improper and undisclosed practice of systematically admitting patients into Community Health Systems' hospitals despite no clinical need. According to the Complaint, Community Health Systems artificially increased inpatient admissions for the purpose of receiving substantially higher and unwarranted payments from Medicare and other sources that wrongfully inflated its financial performance. The Complaint further alleges that the true facts, which were known by defendants but concealed from the investing public during the Class Period, were that (1) the Company had for years engaged in the improper practice of systematically admitting patients into hospitals despite no clinical need, most notably by unnecessarily converting emergency-room visits into more lucrative inpatient admissions; (2) the Company's wrongful admissions procedures were designed to overbill Medicare and other sources for patient admissions; (3) as a result of the improper admissions and improper billing practices, the Company's reported revenues and earnings were materially and wrongfully inflated; and (4) based on the foregoing, defendants lacked a basis for their positive statements about the Company's prospects and growth. It is further alleged that on April 11, 2011, amidst Community Health Systems' $3.3 billion hostile takeover bid of Tenet Healthcare Corp., investors and analysts were shocked to learn that Tenet had filed a lawsuit against Community Health Systems, its Chairman and Chief Executive Officer, and its Chief Financial Officer alleging that Community Health Systems had failed to disclose for years certain fraudulent admissions and billing practices, including its practice of systematically admitting, rather than observing, patients despite no clinical need, in order to artificially increase inpatient admissions for the purpose of receiving substantially higher and unwarranted payments from Medicare and other sources. Following the April 11, 2011 disclosures, Community Health Systems' common stock declined by $14.41 per share, or 35.7%, on unusually heavy trading volume from a closing price of $40.30 per share on April 8, 2011, to close at $25.89 per share on April 11, 2011. If you are a member of the proposed Class, you may move the court no later than July 8, 2011, to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery. Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Kaplan Fox & Kilsheimer LLP -- http://www.kaplanfox.com-- prosecutes investor class actions and actions involving financial fraud. The firm has offices in New York, San Francisco, Los Angeles, Chicago and New Jersey. If you have any questions about this Notice, the action, your rights, or your interests, please contact: Pamela A. Mayer, Esq. KAPLAN FOX & KILSHEIMER LLP 850 Third Avenue, 14th Floor New York, New York 10022 Telephone (800) 290-1952 (212) 687-1980 E-mail: pmayer@kaplanfox.com - and - Laurence D. King, Esq. KAPLAN FOX & KILSHEIMER LLP 350 Sansome Street, Suite 400 San Francisco, California 94104 Telephone: (415) 772-4700 E-mail: lking@kaplanfox.com DEUTSCHE BANK: Robbins Geller Files Securities Class Action ----------------------------------------------------------- Robbins Geller Rudman & Dowd LLP, a 180-lawyer firm, on June 22 disclosed that a class action has been filed on behalf of an institutional investor in the US District Court for the Southern District of New York on behalf of purchasers of Deutsche Bank AG ordinary shares during the period between January 3, 2007, and January 16, 2009. The complaint charges Deutsche Bank and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Deutsche Bank is a global investment bank. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results and concealed the Company's failure to write down impaired securities containing mortgage-related debt. As a result of defendants' false statements, Deutsche Bank shares traded at artificially inflated prices during the Class Period, reaching a high of $159.59 per share in May 2007. Later, Deutsche Bank's shares declined as it reported billions of dollars in losses, many of which were directly or indirectly related to mortgage-backed securities. Recently, the US Department of Justice sued Deutsche Bank for misrepresentations about its mortgage loans. According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) defendants failed to record adequate provisions for losses on the deterioration in mortgage assets and collateralized debt obligations on Deutsche Bank's books caused by the high amount of non-collectible mortgages included in the Company's portfolio; (b) Deutsche Bank's MortgageIT subsidiary was issuing and had issued billions of dollars of mortgage loans which did not comply with stated lending practices, leading to thousands of defaults; (c) Deutsche Bank's internal controls were inadequate to ensure that losses on residential mortgage-related assets were accounted for properly; and (d) Deutsche Bank had transferred billions of dollars in defaulting, or soon-to-default, mortgages to unwitting investors and government programs due to its disregard of adverse findings by outside consultants, company said. Courthouse News Service reports that IBEW Local 90 Pension Fund has also filed suit against Deutsche Bank. DIAL CORP: Faces Class Action Over Misleading Marketing Campaign ---------------------------------------------------------------- Michelle Keahey, writing for The Louisiana Record, reports that a class action has been filed against Dial Corp. claiming the company has a misleading marketing campaign over its product "Dial Complete." Bridget Becnel Delivorias and Karen Finney, individually and on behalf of themselves and all others similarly situated, filed suit against The Dial Corp. on June 14 in federal court in New Orleans. The lawsuit states that the marketing campaign for Dial Complete is deceptive by implying that it will completely protect the consumer from germs. The suit also claims the product is deceptively marketed by claims that Dial Complete's active ingredient Triclosan, enables it to outperform other soap products. The defendant is accused of violation of the Louisiana Unfair Trade Practices and Consumer Protection Law, breach of contract, breach of express warranty, unjust enrichment, negligent design and failure to warn and redhibition. The proposed class action will include all Louisiana residents who purchased Dial Complete products for personal or household use, within the statutory limitations. The plaintiffs are asking for an award of restitution, disgorgement, actual, statutory and punitive damages, attorney's fees, court costs and interest. The lawsuit was filed by Daniel E. Becnel Jr., Matthew B. Moreland and Salvadore Christina, Jr. of Becnel Law Firm in Reserve and LaPlace attorney Robert M. Becnel. A jury trial is requested. U.S. District Judge Jay C. Zainey is assigned to the case. Case No. 2:11-cv-01403 EDEBITPAY LLC: Faces Class Action Over Payday Loan Scam ------------------------------------------------------- Courthouse News Service reports that a federal class action claims Internet payday lenders EDebitPay and Platinum Online Group take information from loan applicants "and use it to forge checks on behalf of the applicants . . . without the applicants' knowledge or consent." Both defendant companies are LLCs that operate out of Sherman Oaks. The two named plaintiffs are a woman from San Francisco and a man from Malibu. "Defendants operate a scam where they lure people into applying for payday loans on Internet websites," according to the complaint. "Defendants take the information they gather from the payday loan applications -- including the applicants' banking information -- and use it to forge checks on behalf of the applicants. These checks are fakes; they are created without the applicants' knowledge or consent. These checks supposedly pay for defendants' coupon service, though no applicant ever agreed to buy such services. In fact, the idea that a cash-strapped, payday loan applicant would spend money on defendants' coupon service, the purpose of which is to encourage a person to spend additional money with defendants' coupons, is absurd. The money is transferred from the applicants' checking accounts to defendants' account before the applicants realize that the forged checks have been drawn or that withdrawals have been made. Defendants have performed this scam thousands of times, and robbed people in need of their remaining money." Both named plaintiffs say they "specifically did not register and/or rejected all third party offers that were advertised on the payday loan websites" when they sought payday loans from the defendants in May this year. Both say that without their knowledge or consent, the defendants used their personal information to register them for the defendants' online services. "However, plaintiffs had never heard of defendants' coupon services, let alone registered for these services." Both say the defendants "drafted remotely created checks" from their checking accounts, payable to Platinum Online Group, without permission, and deposited the checks. They seek restitution, costs and damages. A copy of the Complaint in Deffenbaugh, et al. v. EDebitPay, L.L.C., et al., Case No. 11-cv-03024 (N.D. Calif.), is available at: http://www.courthousenews.com/2011/06/22/Edebitpay.pdf The Plaintiffs are represented by: Karl S. Kronenberger, Esq. Henry M. Burgoyne, III, Esq. Jeffrey M. Rosenfeld, Esq. KRONENBERGER BURGOYNE, LLP 150 Post Street, Suite 520 San Francisco, CA 94108 Telephone: (415) 955-1155 E-mail: hank@kbinternetlaw.com karl@kbinternetlaw.com jeff@kbinternetlaw.com FRONTIER OIL: Reaches Deal to Settle Merger-Related Suit in Texas ----------------------------------------------------------------- Frontier Oil Corporation reached an agreement to settle a consolidated class action lawsuit pending in Texas over its proposed merger with Holly Corporation and North Acquisition, Inc., according to the Company's June 21, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission. On February 21, 2011, Frontier Oil Corporation entered into an Agreement and Plan of Merger with Holly Corporation and North Acquisition, Inc., a wholly owned subsidiary of Holly ("Merger Sub"). Twelve substantially similar shareholder lawsuits styled as class actions were filed by alleged Frontier shareholders challenging the merger and naming as defendants Frontier, its board of directors and, in certain instances, Holly and Merger Sub as aiders and abettors. To date, such shareholder actions have been filed in Harris County, Texas, Laramie County, Wyoming, the U.S. District Court for the Northern District of Texas, and the U.S. District Court for the Southern District of Texas. On March 25, 2011, the lawsuits pending in the District Court of Harris County, Texas, were consolidated under the style In re: Frontier Oil Corp., Cause No. 2011-11451. These lawsuits generally allege that (1) the consideration to be received by Frontier's shareholders in the merger is inadequate, (2) the Frontier directors breached their fiduciary duties by, among other things, approving the merger at an inadequate price under circumstances involving certain alleged conflicts of interest, (3) the merger agreement includes preclusive deal protection provisions, and (4) Frontier, and in some cases Holly and Merger Sub, aided and abetted Frontier's board of directors in breaching its fiduciary duties to Frontier's shareholders. In addition to these claims, the three lawsuits filed in the U.S. District Court for the Northern District of Texas and the U.S. District Court for the Southern District of Texas allege that the defendants violated Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 by making untrue statements of material fact and omitting to state material facts necessary to make the statements that were made not misleading in the joint proxy statement/prospectus. The shareholder actions seek various remedies, including enjoining the transaction from being consummated in accordance with its agreed-upon terms, compensatory damages, and costs and disbursements relating to the lawsuits. On June 17, 2011, the defendants reached an agreement-in-principle with the plaintiffs in: In re: Frontier Oil Corp., to settle the eight consolidated class action lawsuits pending in Harris County, Texas. No agreement has been reached with plaintiffs in the other cases who may attempt to continue to pursue their claims. In connection with the proposed settlement, certain additional disclosures are being made to Frontier's shareholders. The parties contemplate that the agreement-in-principle will be documented by the parties, that the written agreement will contain customary provisions and further agree that approval of the settlement must, and will, be sought from the court following notice to the shareholders of Frontier and consummation of the merger. In connection with the approval of the settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement which, if finally approved by the court, will resolve all of the claims that were or could have been brought in the actions being settled and the other actions, including all claims relating to the merger, the merger agreement and any disclosures made in connection therewith. The parties contemplate that the settlement will provide individual shareholders with the right to opt out of the settlement before the hearing and, if the number of shares held by individual shareholders who opt out reaches a certain percentage, the settlement will further provide defendants with the right to withdraw from the settlement. In addition, in connection with the settlement, the parties contemplate that plaintiff's counsel will petition the court for an award of attorneys' fees and expenses to be paid by the defendants. The Defendants say they cannot be certain that the parties will ultimately enter into a written settlement agreement or that the court will approve the settlement even if the parties were to enter into such an agreement. If the court does not approve the settlement or if sufficient individual shareholders opt out and defendants elect to withdraw from the settlement, the proposed settlement as contemplated by the agreement-in-principle may be modified or terminated. Frontier avers that the settlement will not affect the amount of merger consideration to be paid in the merger. HOLLY CORP: Settles Frontier Merger-Related Suit in Texas --------------------------------------------------------- Holly Corporation reached an agreement to settle a consolidated class action lawsuit in Texas over its proposed merger with Frontier Oil Corporation, according to the Company's June 21, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission. On February 21, 2011, Frontier Oil Corporation entered into an Agreement and Plan of Merger among Frontier, Holly Corporation and North Acquisition, Inc., a wholly owned subsidiary of Holly ("Merger Sub"). Twelve substantially similar shareholder lawsuits styled as class actions were filed by alleged Frontier shareholders challenging the merger and naming as defendants Frontier, its board of directors and, in certain instances, Holly and Merger Sub as aiders and abettors. To date, such shareholder actions have been filed in Harris County, Texas, Laramie County, Wyoming, the U.S. District Court for the Northern District of Texas, and the U.S. District Court for the Southern District of Texas. On March 25, 2011, the lawsuits pending in the District Court of Harris County, Texas, were consolidated under the style In re: Frontier Oil Corp., Cause No. 2011-11451. These lawsuits generally allege that (1) the consideration to be received by Frontier's shareholders in the merger is inadequate, (2) the Frontier directors breached their fiduciary duties by, among other things, approving the merger at an inadequate price under circumstances involving certain alleged conflicts of interest, (3) the merger agreement includes preclusive deal protection provisions, and (4) Frontier, and in some cases Holly and Merger Sub, aided and abetted Frontier's board of directors in breaching its fiduciary duties to Frontier's shareholders. In addition to these claims, the three lawsuits filed in the U.S. District Court for the Northern District of Texas and the U.S. District Court for the Southern District of Texas allege that the defendants violated Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 by making untrue statements of material fact and omitting to state material facts necessary to make the statements that were made not misleading in the joint proxy statement/prospectus. The shareholder actions seek various remedies, including enjoining the transaction from being consummated in accordance with its agreed-upon terms, compensatory damages, and costs and disbursements relating to the lawsuits. On June 17, 2011, the defendants reached an agreement-in-principle with the plaintiffs in: In re: Frontier Oil Corp., to settle the eight consolidated class action lawsuits pending in Harris County, Texas. No agreement has been reached with plaintiffs in the other cases who may attempt to continue to pursue their claims. In connection with the proposed settlement, certain additional disclosures are being made to Frontier's shareholders. The parties contemplate that the agreement-in-principle will be documented by the parties, that the written agreement will contain customary provisions and further agree that approval of the settlement must, and will, be sought from the court following notice to the shareholders of Frontier and consummation of the merger. In connection with the approval of the settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement which, if finally approved by the court, will resolve all of the claims that were or could have been brought in the actions being settled and the other actions, including all claims relating to the merger, the merger agreement and any disclosures made in connection therewith. The parties contemplate that the settlement will provide individual shareholders with the right to opt out of the settlement before the hearing and, if the number of shares held by individual shareholders who opt out reaches a certain percentage, the settlement will further provide defendants with the right to withdraw from the settlement. In addition, in connection with the settlement, the parties contemplate that plaintiff's counsel will petition the court for an award of attorneys' fees and expenses to be paid by the defendants. The Defendants say they cannot be certain that the parties will ultimately enter into a written settlement agreement or that the court will approve the settlement even if the parties were to enter into such an agreement. If the court does not approve the settlement or if sufficient individual shareholders opt out and defendants elect to withdraw from the settlement, the proposed settlement as contemplated by the agreement-in-principle may be modified or terminated. Holly avers that the settlement will not affect the amount of merger consideration to be paid in the merger. JPMORGAN CHASE: Sued Over Alleged Hazard Insurance Kickbacks ------------------------------------------------------------ Courthouse News Service reports that a federal class action claims JPMorgan Chase Bank took kickbacks (commissions and fees) from providers of forced-placed homeowners hazard insurance, and from their own affiliates, and forced borrowers to pay for unnecessary insurance. A copy of the Complaint in McNeary-Calloway v. JPMorgan Chase Bank, N.A., et al., Case No. 11-cv-03058 (N.D. Calif.), is available at: http://www.courthousenews.com/2011/06/22/JPMorgan.pdf The Plaintiff is represented by: Ramzi Abadou, Esq. KESSLER TOPAZ MELTZER & CHECK, LLP 580 California Street, Suite 1750 San Francisco, CA 94104 Telephone: (415) 400-3000 E-mail: rabadou@ktmc.com - and - Joseph H. Meltzer, Esq. Edward W. Ciolko, Esq. Terence S. Ziegler, Esq. Joseph A. Weeden, Esq. KESSLER TOPAZ MELTZER & CHECK, LLP 280 King of Prussia Road Radnor, PA 19087 Telephone: (610) 667-7706 E-mail: jmeltzer@ktmc.com eciolko@ktmc.com tziegler@ktmc.com jweeden@ktmc.com - and - Jeffrey J. Angelovich, Esq. Michael B. Angelovich, Esq. Brad Seidel, Esq. NIX PATTERSON & ROACH, LLP Daingerfield, TX 75638 Telephone: (903) 645-7333 - and - James P. Gitkin, Esq. Eric T. Salpeter, Esq. SALPETER GITKIN, LLP Museum Plaza, Suite 503 200 South Andrews Avenue Fort Lauderdale, FL 33301 Telephone: (954) 467-8622 METROPOLITAN LIFE: GM Retirees File Suit Over Slashed Benefits -------------------------------------------------------------- David Shepardson, writing for The Detroit News, reports that a group of 45 General Motors salaried retirees filed suit on June 22 in Wayne Circuit Court, claiming Metropolitan Life Insurance Co. breached its contract when it slashed benefits. In recent years GM reduced life insurance for most salaried retirees to $10,000 from higher guaranteed amounts. GM ended life insurance for its top former executives. Some retirees lost $500,000 to $1 million in insurance policies when the value was reduced to $10,000, said Andrew Rogers, a lawyer for the retirees. The suit says the reduced benefits are insufficient to even cover funeral and burial expenses and are "extreme and outrageous." Another 300 were also affected and could be affected as part of a class-action, Mr. Rogers said. Mr. Rogers said earlier on June 22 that the John Smale listed in the suit is the former GM chairman. He said late on June 22 that he had been mistaken -- and that the person suing is not the former GM chairman. In a June 1, 2009 letter to retirees on the day GM filed for bankruptcy, then GM CEO Fritz Henderson told retirees who joined GM before 1993 "the amount of Basic Life Insurance provided by GM is being reduced to $10,000" and was effective soon after GM exited bankruptcy the following month. However, GM said retirees could buy additional insurance by enrolling in a voluntary Life Insurance program through MetLife -- and it did not require "proof of good health" -- but they would have to pay for the extra coverage. But during the first two years of participation in the program, the death benefits are equal to the amount of the premiums paid. After that, retirees could get paid full coverage. MetLife notified retirees named in the suit that their "continuing life insurance" coverage would "remain in effect for the rest of your life," but GM reduced the amount of coverage to $10,000, the retirees said in a statement. Some of the letters from MetLife guaranteeing lifetime coverage date to 1986, Mr. Rogers said. "These retirees have taken tremendous losses in their promised, deferred compensation and retirement plans. They are holding written promises from MetLife that they relied on and used for planning their retirement future," said Sheldon Miller, another attorney for the retirees. "Hitting them with this additional loss of life insurance coverage, when they hold lifetime guarantees comes at a time when they can no longer replace insurance on the open market due to their age and reduced income and is unconscionable." The retirees are seeking to reinstate the full value of their reduced policies. MetLife spokesman John Calagna declined to comment on the suit. "We have not seen the lawsuit so we are not in a position to comment on it. MetLife continues to provide valuable life insurance coverage to GM's active employees and retirees," Mr. Calagna said. GM spokesman Jim Cain defended the company's actions. "Without question, the changes needed in order for GM to survive were difficult for many individuals and their families. But the right to modify or terminate employee benefits has always been an integral component of the plans themselves, as was frequently communicated to participants. Unfortunately, Old GM's ultimate decline made both its bankruptcy and these sacrifices necessary to save both GM and thousands of jobs," Mr. Cain said. This is the second suit filed by some GM retirees in recent weeks. Last month, more than 100 former GM executives sued the automaker in federal court to recoup pension benefits slashed during the company's bankruptcy. The retirees, including former vice presidents and high-ranking managers, are trying to recoup benefits plus interest, and want a federal judge to order GM to accurately pay future benefits. The executives suing include a number of former GM vice presidents, including John G. Middlebrook, who was vice president and general manager of vehicle brand marketing. He also was a general manager of the Chevrolet Division and helped launch GM's now-shuttered Saturn division. Others suing include Richard C. Nerod, retired president of GM- Latin America, Africa and Middle East; and Donald W. Hudler, a GM vice president and former president of Saturn. Overall, GM saved $4.6 billion in trimming pension and retiree health care benefits during its bankruptcy reorganization, the company said in a filing last year. NAPA HOME: Recalls 460,000 NAPAfire and FIREGEL Bottles and Jugs ---------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Napa Home & Garden, of Duluth, Georgia, announced a voluntary recall of about 460,000 bottles and jugs of pourable NAPAfire and FIREGEL Gel Fuel. Consumers should stop using recalled products immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. The pourable gel fuel can ignite unexpectedly and splatter onto people and objects nearby when it is poured into a firepot that is still burning. This hazard can occur if the consumer does not see the flame or is not aware that the firepot is still ignited. Fuel gel that splatters and ignites can pose fire and burn risks to consumers. Napa is aware of 37 reports of incidents, including 23 burn injuries to consumers. The product is a clear, pourable gel fuel packaged in clear one- quart plastic bottles and one-gallon plastic jugs and sold in non- scented and citronella scents. The fuel is poured into a stainless steel cup in the center of firepots or other decorative lighting devices and ignited. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11255.html The recalled products were sold at Bed Bath & Beyond, Shopko, Restoration Hardware, specialty and gift shops, furniture stores, and home and garden stores nationwide, as well as through Amazon.com, home and garden catalogs, and home decorators and landscape architects between December 2009 and June 2011 for between $5 and $78. Consumers should immediately stop using the pourable gel fuel in firepots and return all bottles or jugs to the retailer where the consumer purchased the fuel for a full refund. A retrofit for the Napa brand firepots is being evaluated and may be available in the near future. For additional information, call Napa Home & Garden at (888) 893-2323 between 9:00 a.m. and 6:00 p.m. Eastern Time Monday through Friday, visit Napa's Web site at http://www.napahomeandgarden.com/or write to Napa, 3270 Summit Ridge Parkway, Suite 240, Duluth, GA 30096-1617. RITE AID: Files Class Action Over Seating Policy ------------------------------------------------ Leigh Kamping-Carder, writing for Law360, reports that a former Rite Aid Corp. store manager on June 21 filed a proposed class action that could comprise up to 1,000 workers who were allegedly denied proper seating accommodations by the pharmacy chain. Andrew Loesch claims Rite Aid did not provide employees who regularly operated the cash register with appropriate seats, even though the work would allow it, in violation of a California regulation. "Plaintiff and the class members were injured by Rite Aid's common practice of failing to provide seats," the complaint said. SCHOOL DISTRICT OF PHILADELPHIA: Sued Over Transfer Policy ---------------------------------------------------------- Courthouse News Service reports that the education of up to 4,000 autistic schoolchildren is jeopardized by a policy that would automatically transfer such students to new schools for grades three through five and six through eight, according to a class action. A copy of the Complaint in P.V., et al. v. The School District of Philadelphia, et al., Case No. 11-cv-04027 (E.D. Pa.) (Davis, J.), is available at: http://www.courthousenews.com/2011/06/22/PAutistic.pdf The Plaintiffs are represented by: Sonja Kerr, Esq. PUBLIC INTEREST LAW CENTER OF PHILADELPHIA 1709 Benjamin Franklin Parkway, Second Floor Philadelphia, PA 19103 Telephone: (215) 627-7100 E-mail: skerr@pilcop.org - and - Cheryl Krause, Esq. Tara L. Kelly, Esq. Darla D. Woodring, Esq. DECHERT LLP Cira Centre 2929 Arch Street Philadelphia, PA 19104-2808 Telephone: (215) 994-4000 E-mail: cheryl.krause@dechert.com tara.kelly@dechert.com darla.woodring@dechert.com SENSASLIM: Faces AU$4.2-Mil. Class Action Over Diet Spray --------------------------------------------------------- Julia Medew and Ian McIlwraith, writing for The Age, reports that diet spray company SensaSlim is facing a AU$4.2 million class action from more than 70 people who say they were duped into buying a franchise to sell the herbal product. Law firm Slater & Gordon said it was working with the Australian Competition and Consumer Commission to see if its action against SensaSlim in the Federal Court for misleading and deceptive conduct could include a bid for compensation on behalf of franchisees. Senior lawyer Van Moulis said he had been contacted by more than 70 people who had each paid about AU$60,000 to sell the spray in exclusive areas based on SensaSlim's claim that it had medical research to prove the efficacy of its product. "They are pretty angry and a lot of them are shocked that they seem to have been duped," Mr. Moulis said. The Age revealed on June 22 that the ACCC had won a Federal Court order to freeze SensaSlim's assets based on allegations it had misled consumers. It coincided with revelations that SensaSlim's "research" appeared to have been fabricated with the creation of the Geneva-based "Intercontinental Research Institute". The institute claimed positive results from a voluntary internet trial of more than 11,000 users and featured photographs of executives who were actually doctors from St. Paul Lung Clinic in Minnesota. The doctors said they had nothing to do with the institute or SensaSlim. The institute's Web site was not operating on June 22. The same doctors' photos are on another Web site for the apparently non-existent Mountebank Clinic in New South Wales. The "clinic" is claimed to be part of a group called Reef Health, which is owned by Roxanne Naylor and Andrew Tatar, one of three men arrested in Vanuatu in 2007 for allegedly helping to smuggle convicted conman Peter Foster out of Fiji. Mr. Foster, best known for his financial dealings with Cherie Blair, has previously been involved with several other diet products labeled as scams. Reef Health on June 22 took down the Mountebank Clinic Web site and its solicitors sent a letter to The Age accusing its reporters of having "hacked" the site. The Age accessed the pages through Google. Mr. Moulis said his clients were shocked by the "sensational revelations" about SensaSlim in The Age and feared they would lose their money. "They had relied upon representations by SensaSlim that the product was as good as they said it was and that they had the medical research to back it up." If the ACCC does not include Mr. Moulis's application for compensation, he said he would launch a class action in the Federal Court to run alongside the ACCC's case. The law firm that had been acting for SensaSlim, Kennedys, said it had terminated its contract with the company. Seven people have complained about SensaSlim to the Therapeutic Goods Administration, including Melbourne academic Dr. Ken Harvey, whose complaint prompted the company to launch a defamation case against him. The TGA said the case had prevented it from proceeding with complaints against SensaSlim. This meant SensaSlim could continue to promote and sell its product. SensaSlim did not respond to questions from The Age on June 22 and continued to spruik its product as "the most effective slimming solution available in the world today". SOUTHERN UNION: Being Sold for Too Little, Tex. Suit Claims ----------------------------------------------------------- Courthouse News Service reports that shareholders say Southern Union Co. is selling itself too cheaply through an unfair process to Energy Transfer Equity, for $7.9 billion: $4.2 billion in new ETE shares priced at $33, and assumption of $3.7 billion of Southern Union debt. A copy of the Complaint in Jaroslawicz, et al. v. Southern Union Company, et al., Case No. 2011-37091 (Tex. Dist. Ct., Harris Cty.), is available at: http://www.courthousenews.com/2011/06/22/SCA.pdf The Plaintiff is represented by: Roger B. Greenberg, Esq. Thane Tyler Sponsel III, Esq. SCHWARTZ, JUNELL, GREENBERG & OATHOUT, LLP Two Houston Center 909 Fannin Street, Suite 2700 Houston, TX 77010 Telephone: (713) 752-0017 E-mail: rgreenberg@schwartz-junell.com tsponsel@schwartz-junell.com - and - Marc I. Gross, Esq. Gustavo F. Bruckner, Esq. POMERANTZ HAUDEK GROSSMAN & GROSS LLP 100 Park Avenue, 26th Floor New York, NY 10017 Telephone: (212) 661-1100 E-mail: migross@pomlaw.com gfbruckner@pomlaw.com SZ ENTERPRISES: Faces Class Action Over Unpaid Wages ---------------------------------------------------- Christine Stuart at Courthouse News Service reports that The Kirby "high end" vacuum cleaner company, through its Connecticut distributor, promised desperate workers sales jobs at $500 to $800 a week, then paid them as little as 40 cents an hour for 70-hour weeks, eight workers say in a federal class action. "Defendants led plaintiffs to believe that promised paychecks, bonuses, and prizes were around the corner. But as defendants knew all along, nothing was around the corner," says the opt-in class action, filed by New Haven Legal Assistance. There are four defendants: Scott Zabka, "a distributor of Kirby- brand vacuum cleaners," dba co-defendant S.Z. Enterprises, of Orange, Conn., and Scott Fetzer Companies dba The Kirby Company, a Delaware corporation based in Ohio. "Defendant Kirby only sells its vacuums and related products through a 'Company Marketing System,' a personnel system, and a business system implemented at their authorized regional distributors," the complaint states. "Defendant Kirby conditionally appointed Defendants Zabka and SZE as the sole distributor of its products in most or all of Connecticut in 1999. Defendants Kirby conditioned that appointment on Defendants Zabka's and SZE's acceptance of the former's control and domination of the business and personnel policies." In a nutshell, the complaint states: "Defendants recruited plaintiffs and other job applicants to work for them by fraudulently misrepresenting their business and the terms and conditions of employment. Among other things, defendants promised $500 - $800 in pay per week, characterized the work as a management-training program and characterized their business as an appliance outlet or home maintenance company. Not only did defendants fail to pay $500 per week, they paid only a fraction of the amount owed by law. In reliance on defendants' continued false misrepresentations, Plaintiffs worked without proper compensation and offered up their own family and friends to defendants as sales prospects. . . . Plaintiffs and other employees, hoping to earn a living during hard times, held on until they were either broke or figured the business for a scam. Defendants themselves enjoyed and profited from plaintiffs' free labor." One named plaintiff was paid $85 for three weeks of work at 70 hours a week. One received $200 for three weeks of work. A third made $25 for four weeks of full-time work, according to the complaint. Just as horrifying, perhaps, for anyone who has done such work: "Defendants required employees to report to the Orange office every morning, six days a week, to participate in two-hour meetings," according to the complaint. "Kirby and S.Z. Enterprises utilize recruiting, hiring, and employment policies that are well-designed to take advantage of the so-called jobless recovery," plaintiffs' attorney James Bhandary-Alexander said in a statement. "Low-wage workers are facing desperate times, and Kirby monopolizes on that by lying to them, stringing them along, and ultimately paying them nothing for their work. By the time these workers figure out they have been scammed, they have worked hundreds of hours for free. Many of them wind up penniless." New Haven County had a 9.3% unemployment rate in April, higher than the national average, according to the Bureau of Labor Statistics. More than a quarter of New Haven residents live in poverty. The plaintiffs seek damages for unpaid wages and overtime, plus liquidated damages to be determined at trial. A copy of the Complaint in Dixon, et al. v. Zabka, et al, Case No. 11-cv-00982 (D. Conn.), is available at: http://www.courthousenews.com/2011/06/22/Vacuum.pdf The Plaintiffs are represented by: Susan Nofi-Bendici, Esq. James Bhandary-Alexander, Esq. Shelley White, Esq. NEW HAVEN LEGAL ASSISTANCE ASSOC. 426 State Street New Haven, CT 06510 Telephone: (203) 946-4811 Email: snofi-bendici@nhlegal.org jbhandary-alexander@nhlegal.org swhite@nhlegal.org UNITED STATES: Homeless Veterans File Class Action -------------------------------------------------- Steve Vogel, writing for The Washington Post, reports that the Department of Veterans Affairs, which is the subject of a class- action lawsuit filed this month alleging that its failure to provide housing to veterans suffering from severe post-traumatic stress disorder or other mental disorders leaves many of them facing homelessness, has filed its master plan for modernizing the West Los Angeles campus, which is at the center of the dispute. "This Master Plan builds on VA's progress to end veteran homelessness and ensures that land use at West Los Angeles will continue to put the needs of Veterans first -- now and into the future," Donna M. Beiter, director of the VA's Greater Los Angeles Healthcare System, said in a statement. Mark Rosenbaum, an attorney with the American Civil Liberties Union representing homeless veterans in the lawsuit, said the master plan makes no advances from a draft plan filed in January, which he criticized as inadequate. "There's nothing in this," he said on June 22. "It's a commitment to no commitment." The lawsuit, filed June 8 in the U.S. District Court in California, asks a federal judge to order the VA to use empty buildings on the sprawling West Los Angeles campus to provide permanent supportive housing for a class of veterans who suffer from conditions that the plaintiffs argue require a stable home environment for successful treatment. The VA estimates that on any given night, some 76,500 veterans in America are homeless. VA Secretary Eric K. Shinseki has pledged to end "the shame of veterans' homelessness" by 2015. "Though much work remains, VA has made significant progress to reduce homelessness over the past two years under his leadership," Ms. Beiter said. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Leah Felisilda, Noemi Irene A. Adala, Joy A. Agravante, Julie Anne Lopez, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2011. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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